Speaking to journalists on Tuesday, Tudge said people's healthcare records cannot be accessed solely with a Medicare card number, and that a small number of people were impacted.

"The advice that I've received from the chief information officer in my department is that there has not been a cybersecurity breach of our systems as such, but rather it is more likely to have been a traditional criminal activity," Tudge said.

As reported by The Guardian on Tuesday morning, Medicare card details are being traded online for a cost of approximately AU$30.

The minister said the department was only made aware of these activities yesterday, and had referred the matter to the Australian Federal Police.

"When we are made aware of any such allegation or breach, the Australian Federal Police is informed immediately," he said.

Tudge refused to comment on whether the information leak was a result of an employee with access to Medicare data selling the information.

"For people like Alan Tudge to say there is no data security issue is obviously incorrect, and I think reflects a very poor understanding of what the power of these sorts of linked datasets is," Yarwood told ZDNet.

"[A Medicare card] is a valid form of identification, so the potential to actually be able to use that data to then go on and then apply other details -- it's the ability to be able to link all this stuff together.

"It's an amazingly intrusive level of detail on people's lives that could be reassembled."

Labor deputy leader Tanya Plibersek said the incident was a very serious breach of privacy.

"I'd also say that this has become a repeat nightmare," she said.

"We've got the government that brought you the Census debacle, that brought you the failed NAPLAN online efforts, that's bringing you a second-rate NBN, presiding over another internet catastrophe with leaked Medicare records now available to the highest bidder."

Assistant Treasurer Michael Sukkar said the government took "extraordinarily seriously" the data it collected on individuals.

"All I can do is assure you that we will do absolutely everything possible to protect that data," he said. "If that means more work and more upgrades to our system, then so be it."

Thank You

By registering you become a member of the CBS Interactive family of sites and you have read and agree to the Terms of Use, Privacy Policy and Video Services Policy. You agree to receive updates, alerts and promotions from CBS and that CBS may share information about you with our marketing partners so that they may contact you by email or otherwise about their products or services.
You will also receive a complimentary subscription to the ZDNet's Tech Update Today and ZDNet Announcement newsletters. You may unsubscribe from these newsletters at any time.